Friday, August 11, 2006

Quality Leadership ? Cheap shot by Ford Motor Company - They have countered nicely!



My previous Post about Ford (below) was one that was difficult to write since I hope Ford can pull out of their financial woes. The following post is one of hope that Ford will once again turn the corner and the Glass House (Headquarters) will once again shine bright in Dearborn.

Yesterday the State of Michigan announced a deal that will offer Ford Motor Co. $151 million in Michigan tax breaks in order to spur $1 billion in Ford investments and save aprox. 14,000 jobs in Michigan. Full article @

Clearly this is a much-needed boost to Michigan’s economy and just goes to show you what can be done in an election year (current governor behind in polls).

I have two suggestions for Mr. Ford. First, I hope Ford continues to improve quality and increase their sales. However, eliminating defects does not always equate to increase sales. The one ingredient that continuously missing is “Innovation” (Ford is not alone).

I’m sure Dr. Deming informed Ford of this in the early 1980s. Dr. Deming’s “Quality Chain” is more evident today that it has ever been. CLICK PIC TO ENLARGE, CLICK AGAIN WHEN 4 ARROWS APPEAR.

Second, I would like to recommend a book for required reading by all Ford employees (take notice all you Six-Sigma, Lean & other charlatan quality consultants who claim you have the answers/solutions). It’s about Innovation, Just-in-Time Manufacturing; it is full of quality improvement examples, employee motivation and the importance of education.

A “Ford” wrote the book. It was written in Dearborn, Michigan where the deal above was made. Dearborn is the home of Ford World Headquarters. Dearborn is where the home foundation must be rebuilt "brick-by-brick" in order for all Ford outlets to succeed.

For good measure Ford Management should also read "The New Economics" by Dr. Deming.

Take notice of the legacy left by these two men, they gave you the path long ago, it's time to find your way back.



One of the best profound quality statements I have ever read was by Dr. Brian Joiner when he wrote in his book “Fourth Generation Management” in 1994 (I highly recommend) about data and figures. He wrote of three ways to improve the figures: distort the data, distort the system and improve the system. Improving the system is the most difficult. In my 30 years in business and education I have seen the first two happen much more frequently than the latter because of short-term thinking and mismanagement.

As Dr. Joiner stated improving the system is the most difficult and I believe this is most true during times of stress when it comes to accounting and Wall Street performance. When jobs are on the line, borrowing from creditors and meeting unrealistic expectations by managers leaves most people to distort the data (number cooking) and the system.

This happens all the time in sales and quarterly reporting. Sometimes a company knowing the figures are not accurate reports anyway to keep Wall Street and Shareholders of their back. HOWEVER, what about the shareholders who purchase stock during this time of deceit?

In one example I can remember when AT&T offered their IPO on their Wireless Stock at a price of $29.50 knowing weeks earlier they would soon be reporting negative numbers that would affect the stock which went down never to recover. Source: Two Class Action Suits currently underway.

Now Ford Motor Company has played a cheap shot by announcing it has revised it Q2 loss, wider than reported. Ford said in a filing on Wednesday that its second quarter loss was $131 million more than previously reported because of an increase in estimates for the company's pension curtailment loss. Source: Ford Motor Company

Now how could Ford Not know about the pension estimates? What about the people (including employees) who bought stock in the past few days based on one set of figures not knowing the next day the losses would be wiped out.

Ford Quality NONE!

P/S – I own a Ford Escape, Mercury Cougar, Dodge Stratus and Honda Accord. Guess which one has never been back for warranty work or problems?

Other post on Ford Motor Company by qualityg:


Anonymous said...

Great Post QG!

Andy from Ford Dearborn

Ralph Bernstein said...

The commemorative edition of Today and Tomorrow by Henry Ford can be found at